For four blogs we have covered the Ps of starting and growing a successful business. And many of you have wondered why profit came last on the list of the 5 P’s when profit is the point, right? The answer is very simple, and we will explain it in the most understandable terms.
In general, the first four on the list, as you remember are the promise, products, process, and people, which are the setup points for your business. Without any of these, you cannot build trust with your customers. They need to know you have all four of these in hand.
The profit comes from the knowledge that you care about the experience, you have what they desire, you have the way for them to get those products, and of course, the infrastructure to facilitate the transfer to them. This is how you get paid and bring them back.
But profit has a hidden side you might not know.
The Unknown Side of Profit
Most entrepreneurs see profit as the money coming in. Beyond the profit and loss ratio, they only recognize the intake of new money and use that as a metric for success. This is tragically pedestrian thinking.
Why? Because profit is more than that. And it can spark in your mind thoughts you might not have had before. Thoughts like “If I did something differently, could my life be better?” “Is spending all my time at work to build my empire worth the loss of time with family?”
Only you can answer these based on your priorities. The answers come quickly if you value people over profits. They get more distasteful if you value greed or hate working for someone else. Your employees probably ask similar questions themselves.
If you are questioning how your situation could be different, then you are missing the true potential of profit as it enhances your situation. Profit breeds expansion. Expansion breeds management hires to do what you do so you can spend more time getting profit without additional work. The spiral only goes up.
What Profit Can Do for You
In the early days of your business, you are probably a micromanaging megalomaniac. It’s not a judgment; we all are. We want everything to hum, to work perfectly, and will fight to make it exactly as we envision it in our plans.
That time is lost forever, but not wasted. You needed to do that hard prep work to get the Swiss watch ticking. It is your business and it succeeds or fails based on the intensity of your drive to make it profitable. And this is one of the things profit does for you. It gives you time back.
Let me elaborate.
We get into business to set our schedule, take time when we need it without scrutiny, and make money that will redefine our life. And we want to do something we love so the work is enjoyable. You are doing what you want versus what people tell you to do.
You are the boss and it is glorious. But, as the boss, you need to be there every day, right? No. You are making a profit. You have plans for that profit.
Maybe you’d like to get out of the business, spend time doing fun things with the kids, go play more golf, go to the spa, take that trip to Italy. We work to live but should never live to work. Hire the people you trust to keep the trains running on time and trust them not to fail you.
It’s only when you’re freed up from making every decision that you’ll be able to start thinking about the possibilities. It might even mean opening a new division or even buying another business!
And if something slips, revisit the P’s and see if one of them needs a renewed sense of attention. Maybe your promise is outdated or doesn’t jive with the new traffic. Maybe you need different people to help in your business. And maybe your products are stale and need new life.
Whatever the problem, minimize your influence to maximize your process and people. You’ll only be freed up by aligning and assigning authority. This is when you can live the life you wish for and the life you promised yourself when you started this venture. It’s time to set up your business to prop up your life instead of you always propping up your business.
Check out this week’s podcast to hear more! Business Owner Breakthrough Podcast